After a sluggish summer, the pace of home price appreciation in San Diego County’s housing market slowed again in September.

The S&P/Case-Shiller Home Price Index showed Tuesday that from September 2013 to September 2014, home prices in the county grew 5.1 percent. It continued an intense slowdown in the pace of appreciation from a little more than a year ago, when prices were increasing 21.5 percent annually. At that time, the market’s large gains were driven by investor-led activity like foreclosure resales and fixing-and-flipping. Now that foreclosures have waned, traditional factors like supply and demand, income, interest rates, consumer confidence and prices are once again pacing the market.

“Prices continue to trend upward but most importantly they continue upward at a sustainable rate,” said Mark Goldman, a loan officer and real-estate lecturer at San Diego State University. “We all want our houses to double in value, the problem with that is you end up with a market that’s going to collapse on its own weight.”

Goldman said that’s what happened during the housing bubble that led to the Great Recession, when banks were lending without limits. Now that restrictions are more strict, affordability has put a cap on how much people can spend, with wages not stagnating across the country. That hits appreciation.


The Case-Shiller index measures repeat sales of single family homes, but lags two months, so the September activity came before interest rates fell to their lowest levels in more than a year.

“If you want to own a home in this market you kind of have to spend as much as the bank will let you,” Goldman said. “We saw what happened when the bank would actually have no limit on what they’d let you spend on a house.”

September was the second consecutive month of slowing on the county index, which fell less than a point to 203.31. The index has remained in the 203 range for the past four months. In August, home prices were up 6.2 percent over the year.

Annually, San Diego County’s 5.1 percent gain ranks it ninth on the 20-city index, which rose 4.9 percent from September 2013. David Blitzer, chair of the index committee at S&P Dow Jones Indicies, said there’s been slowing in the housing market nationwide, although there are still many positives.

“Housing starts held above 1 million at annual rates on gains in single family homes, sales of existing homes are gaining, builders’ sentiment is improving, foreclosures continue to be worked off and mortgage default rates are at pre-crisis levels,” he said. “With the economy looking better than a year ago, the housing outlook for 2015 is stable to slightly better.”

CoreLogic DataQuick, another real-estate tracker, reported that the median price in the county for all homes was $445,000, up 5.5 percent over the year. It fell to $440,000 in October.

This article was originally published in the San Diego Union Tribune and can be found HERE.